Wednesday, December 20, 2006

Eat the Rich
Is it time to grind the pigs for sausage yet? Wall street is making the rich richer:
The upper echelon of Goldman Sachs — called the "golden 25" — could get at least $25 million each.
Lehman Brothers Holdings Inc., and Bear Stearns Cos. said they would pay out about $12 billion in compensation — more than $300,000 per employee.

Morgan Stanley Inc., the second-largest U.S. investment house, gave chief executive John Mack $40 million in stock and options for 2006, reflecting one of the largest bonuses awarded to a Wall Street CEO.

I get that money may spill over into the NYC economy from the bonuses. But, like Galbraith said, "If you feed enough oats to the horse, the sparrow will survive on the highway." This money isn't going to useful places:
Real estate is a big beneficiary of bonuses, as plenty of bankers look to upgrade their digs or buy their first pad.

"A lot of my Wall Streeters have been pounding the pavement anticipating the bonuses," said Louise Phillips Forbes, of Halstead Property. "They're prepared to pay a tremendous amount of money."
Earlier this month, Forbes said she sold 11 apartments. More than half of those buyers worked on Wall Street. Forbes says she has about 200 apartments for sale ranging from $500,000 to $6 million. Many of those, she said, will go to bankers.

In July 2005, BMW of Manhattan opened a second showroom on Wall Street. He said his company plans for bonuses, ensuring it has enough inventory to satisfy any urges to buy a sleek BMW.
Falk said he's running an ad that says: "My bonus is faster than your bonus."
And you can't forget that Wall Street essential — the fancy suit.

"It definitely means business," said Phil Kornblatt, director of retail for Hickey Freeman, a maker of fine suits that are popular on Wall Street and routinely cost $1,500. "We noticed a big increase in sales, and I believe most of it is due to the bonuses."

So, I'm supposed to be excited that Wall Street bonuses might trickle down via frivolous pathways like sports cars and high end real estate? Please. I'm surprised the article doesn't sing the praises of the powerful spa industry and the jobs it creates for the city (can I wax your back Mr. Broker?). After buying toys, rich people keep their money.

Imagine if some of that money went directly to helping NYC rather than plumping members of the fleshy straight white suite parade. Show me how Wall Street bonuses promote affordable health care availability, education, and affordable housing.